This brief comment from the Legendary Trader Dennis Gartman.  For subscription information for the 5 page plus Daily Gartman Letter L.C. contact – Tel: 757 238 9346 Fax: 757 238 9546 or E-mail:dennis@thegartmanletter.com HERE to subscribe at his website.

THE EUR VS. THE US$: A  “Reversal” Of Fortune?:   Note then the fact that the EUR  “reversed” to the downside yesterday; that is, having made new high vs. the US$ the EUR  traded lower and below the previous day’s low, grabbing our  attention. However, the case for  a weaker EUR is not truly made until this well defined trend line is well and truly broken.

THE TRANSPORTS: A Trend Line Under  Duress: Depending upon  the thickness of one’s pencil when this trend line  is drawn, it has either been broken or is in danger of being broken, and this follows Friday’s reversal to the downside!  Technically, for the broad  market, this is ominous. Attention must be paid. So  pay it!

Here in the US, yesterday’s “action” in the market was perhaps some of the worst we can recall seeing in a very long while. The market opened higher; it rose sharply higher, sufficiently so that the Dow was 110 points higher very early in the session; and it closed hard upon its lows. Had we not had a series of “reversals” to the downside last week that take precedence, we’d be reporting yesterday’s action as near classic “reversal” to the downside. One by one lesser lights in the market were taken out behind the proverbial barn and shot, although the greater lights… the Apples, the Goldmans, and now the Amazons et al held well compared to the rest of the market. We fear they too may be taken out and shot sooner rather than later, for the margin clerks are now sharpening their pencils and when they do they are merciless. As we like to say, and as we have said time and time again, “When they raid the house of ill repute, the good girls and the piano player too go to jail.”

Mr. Gartman has been in the markets since August of 1974, upon finishing his graduate work from the North Carolina State University. He was an economist for Cotton, Inc. in the early 1970’s analyzing cotton supply/demand in the US textile industry. From there he went to NCNB in Charlotte, N. Carolina where he traded foreign exchange and money market instruments. In 1977, Mr. Gartman became the Chief Financial Futures Analyst for A.G. Becker & Company in Chicago, Illinois. Mr. Gartman was an independent member of the Chicago Board of Trade until 1985, trading in treasury bond, treasury note and GNMA futures contracts. In 1985, Mr. Gartman moved to Virginia to run the futures brokerage operation for the Virginia National Bank, and in 1987 Mr. Gartman began producing The Gartman Letter on a full time basis and continues to do so to this day.

Mr. Gartman has lectured on capital market creation to central banks and finance ministries around the world, and has taught classes for the Federal Reserve Bank’s School for Bank Examiners on derivatives since the early 1990’s. Mr. Gartman makes speeches on global economic and political concerns around the world.

If there is one thing that Canadians are never happy with it is the Canadian dollar.  When it was flirting near that record low of 62 cents nearly a decade ago, everyone lamented the future of the Loonie and closer ties to the U.S. were being recommended from various corners of Bay Street.  It was too expensive to buy anything that was imported, it was too costly to make that annual trip to Florida, and tickets to a Broadway play were prohibitive.  We felt poorer.  We must have been doing something wrong.

But we did nothing wrong back in those days because it was 100% a U.S. dollar story.  The U.S. was home to the Internet mania and all the global capital flow that came with it and Robert Rubin, Treasury Secretary at the time, was carrying out an overtly strong dollar policy partly to keep inflation at bay in what was an overheating U.S. economy. Moreover, commodities were in a bear market, and since the U.S. is a net raw material importer, this too provided impetus to the U.S. dollar rally.  I recall all to well telling clients that the Loonie was actually either holding its own or appreciating against the global basket of non-U.S. dollar currencies.  People would just roll their eyes because who cares about other currencies when most of our trade and travel is with the U.S. That, of course, is true, but it misses the point; the weakness in the CAD was the flip-side of the strength in the U.S. dollar.  The fact that we were outperforming the other major currencies was a reflection that we were not doing anything wrong.

*A weighted average of bilateral exchange rates for the Canadian dollar against the currencies of Canada’s major trading partners. The six foreign currencies in the basketare the U.S. dollar, the Euro, the Japanese Yen, the U.K. Pound, the Chinese Yuan, and the Mexican Peso. 
Source: Haver Analytics, Gluskin Sheff

…..read more HERE.

“Baruch liked gold mines.  There is always a market, he pointed out, for their product, and at a satisfactory price.  Gold, he insisted, is one of the very few things in the world that approaches the status of a permanent investment”……read more HERE.

…..read full commentary HERE. Or summary HERE.

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…..read full commentary HERE. Or summary HERE.